Health secretary warns PM against plan to cap care costs – report

Written by Emily Prescott on 25 February 2019 in News
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Possible revival of care cap plan would ‘confer a significant benefit to the well-off at the expense of the general taxpayer’, Matt Hancock has told Theresa May

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Health secretary Matt Hancock has called on Theresa May to halt plans for a £100,000 "universal" cap on social care costs.

In a letter seen by the Telegraph, Hancock told the prime minister that he was "concerned" that the cap - which could cost up to £3.4billion and is set to be included in the government's long-delayed social care green paper - would benefit the wealthy over average earners.

The limit would see people pay a maximum of £100,000 for their care over their lifetime, excluding the cost of accommodation.


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Such a cap was recommended by a commission in 2011, chaired by economist Sir Andrew Dilnot, which said that a cap, that it recommended by set at £35,000, would encourage the development of insurance products to meet the pre-cap costs.

Although the government initially accepted the recommendation with a higher cap limit, it subsequently scrapped the plan, and the Conservatives set out plans for people receiving care to meet the full cost of their care costs if they have assets of at least £100,000 at the 2017 snap election.

However, these plans proved unpopular and the government subsequently said it would produce a green paper that would set out the plan for reform. The Department of Health and Social Care has pledged it will not lead to a “protracted debate” on the future of the sector, but will commit to a funding plan for the sector as part of this year’s Spending Review.

Ahead of the publication of the green paper, which has been delayed since the autumn, Hancock apparently warned that any plan to re-introduce the cap would "confer a significant benefit to the well-off at the expense of the general taxpayer", adding that "raising taxes is likely to be the most promising choice to fund this".

Hancock also suggested in his letter that he backed a radical new system of insurance to fund care of the elderly care modelled along the lines of the auto-enrolment pension scheme.

Under the "opt-out" scheme, money is automatically deducted from people's pay to cover the cost of their care in later life.

Hancock said in his letter that the government has done "enough to assure ourselves" that there is a "workable model for voluntary insurance".

He also called for the green paper to include plans for a compulsory premium deducted from the earnings of the middle-aged and over 65s to fund the cost of their care in older life.

The health secretary said: "Without this option we leave ourselves exposed to criticism that we have ducked the issue of sector sustainability that many are hoping funding reforms will address."

Under England’s care system, those in residential care currently face losing all savings and assets – including the value of their house – down to their last £23,500.

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Emily Prescott
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Emily Prescott reports for Politics Home, where a version of this story first appeared

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